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EU 'working against time' on Greek debt

09 February 2012, 18:01

Greece - Greek debt rescue talks have gone into overtime, the European Commission said on Thursday, as eurozone finance ministers waited amid uncertainty on wrangling over spending cuts.

"We're working against the clock, we're in stoppage-time," said Amadeu Altafaj, spokesperson for European Union Economic Affairs Commissioner Olli Rehn.

He was using a football analogy to describe efforts to try and close a new deal to restructure Greece's €350bn debts.

Altafaj said Greek political rivals had "made great advances", but senior national negotiators and EU officials cautioned against expectations of anything more than a partial, conditional agreement at the ministerial meeting starting at 18:00.

With gaps in the sums being put before the Eurogroup in Brussels, and domestic pressure mounting with a two-day general strike looming on Friday, Altafaj said it was "important that the ministers discuss all this as soon as possible".

Now that international creditors have drawn up their assessment of what the Greek government needs to do to obtain a fresh €130bn lifeline, the ministers have to give their view on whether Greek Finance Minister Evangelos Venizelos' plans "are sufficient, or not".

Little worry

Altafaj said the "uncertainty would only grow" if ministers did not meet.

An EU diplomat said there was "a little worry, there is not a complete deal at the Greek end", referring to €300m holes for 2012 and also for 2013 in Athens' financial planning.

Altafaj denied any knowledge of a reported two-week deadline being on offer for solutions there.

While these sums may seem small compared to the overall funds at stake, the diplomat said "there will not be a deal unless there is agreement across the board".

Some market commentators meanwhile were still warning of default when a March 20 deadline falls for Grece to repay bond loans.

The first tangible breakthrough should be on a "voluntary" write-down that would wipe at least 70% off the bottom-line value of private investors' Greek bond holdings. Banks were meeting in Paris ahead of the EU talks.


Another diplomat said there is a "concensus" to close off this part of the deal - "the biggest debt restructuring ever".

The deal would require a €30bn recapitalisation of Greek banks, out of the €130bn bailout agreed by EU leaders in October.

As a result, the diplomat's government would likely be pushing for "a conditional green light" on the new bailout, anchored in €100bn of loans from eurozone, IMF and some EU partners.

"On condition that Greece makes the savings it must," he added.


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